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Intellectual Property
01 Jun 2010
Has the patent tortoise almost reached the finish line?
The Patents Bill, which will provide a complete re-write and reform of New Zealand's patent law, has been reported back from Parliament's Commerce Select Committee and is heading for its second reading in Parliament. And in a new twist on the old fable, the Select Committee has added a few hare-like twists to this tortoise of a piece of legislation.
New Zealand currently limps on under the ancient Patents Act 1953, which includes quaint anachronisms such as local novelty. The reform process began well over a decade ago, with a draft Patents Bill circulated for comment as far back as 2002. The Bill was introduced into Parliament in July 2008. It now seems possible that the legislation will be passed in 2010, and perhaps come into force in 2011.
Software Patents?
Rather than continue to treat software-related inventions in the same way as any other inventions, the Select Committee has decided to pitch New Zealand into the type of uncertainty which reigns in Europe, by excluding computer programs from patentability.
The Committee's "reasoning" is sieve-like. The Committee asserts that there is no inventive step in software development. If that was the case, there would be no need to exclude computer programs from patentability. There was no exclusion for computer programs in the Bill prior to the Select Committee report. Computer programs would then, and appropriately, fall to be considered by the same inventiveness tests as other asserted inventions. And, of course, there have been software inventions which are truly inventive.
Perhaps realising that the no inventive step argument was a bit flimsy, the Committee said that software patents can stifle innovation and competition, can be granted for trivial or existing techniques, and are inconsistent with the open source model. This is odd and somewhat paternalistic. It appears to assume that our examiners cannot be trusted to do their job.
Software patents stifle innovation and competition no more than other patents. Hand-in-hand with New Zealand's patent reform, there is a drive to improve the standard of patent examination.
The competition justification is baseless; it is a feature of a free market that software developers can choose whether to use an open source or proprietary model. Last time we looked, the copyright system still catered for both proprietary and open source models, so it is difficult to see how relying on this as a policy argument in the patent sphere can be credible.
Lastly, the Committee considered whether it may be possible to provide that "embedded software" inventions could be patentable, but decided that it was too difficult to make this distinction. The Committee was buoyed by advice - presumably from the Ministry of Economic Development - that excluding computer programs from patentability was "unlikely" to prevent patents being granted for inventions involving embedded software. For "unlikely", read that the Committee's recommendation to exclude software from patentability will lead to years of uncertainty and litigation on this issue. The types of distinctions the Committee grappled with on this issue reinforce how flawed the Committee's reasoning about software inventions is.
Oppositions are Back
Back at the start of the reform process, the Institute of Patent Attorneys advocated a re-examination system, asserting that the opposition process was inefficient and unpopular. When the draft Patents Bill was circulated (in 2002), the Institute did a u-turn, and advocated for retaining oppositions. It is no wonder the Select Committee was confused.
The result is that the Bill provides for both re-examination and oppositions. Revocation is of course also available. There are limited restrictions on the number of bites at the cherry a party can take. This proposal is unlikely to achieve efficiency in the system. The dual system instead adopts a "worst of both worlds" approach, and will give determined opponents plenty of opportunities to disrupt, and add to the expense of, patent applications.
Patent Term Extensions
The Select Committee found no room for patent term extensions for pharmaceutical and other patents where regulatory processes delay the commercial life of a patented product. Whether this is a pure policy position, or something which is being held in reserve for Free Trade Agreement negotiations with the USA, remains to be seen.
Authors
Earl Gray
Partner - Intellectual Property
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John Shackleton
Partner - Dispute Resolution
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Tracey Walker
Partner - Dispute Resolution
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Richard Watts
Partner - Intellectual Property
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Sarah Chapman
Senior Associate - Intellectual Property
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Claire Foggo
Senior Associate - Intellectual Property
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Sonya Hill
Senior Associate - Corporate & Commercial
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In This Article:
New Zealand currently limps on under the ancient Patents Act 1953, which includes quaint anachronisms such as local novelty. The reform process began well over a decade ago, with a draft Patents Bill circulated for comment as far back as 2002.
